WASHINGTON, Jan 29 (Reuters) - The U.S. Energy Department said on Wednesday that President George W. Bush's plan to spend $1.2 billion of government funds to help develop a hydrogen-fuel car won't all be new money.
In his State of the Union speech to Congress on Tuesday, Bush proposed $1.2 billion in research to build hydrogen-powered automobiles that would be free of exhaust fumes and help reduce U.S. oil imports.
In a briefing with reporters on Wednesday, Energy Secretary Spencer Abraham said $720 million will be new funding, spread over the next five years, to develop the infrastructure needed to produce, store and distribute hydrogen for use in fuel cells and electricity generation.
Another $500 million was from a program announced last year, which will spend the money over the same five-year period on the administration's "Freedom Car" program to build vehicles that would be fueled by hydrogen.
Abraham said the administration wants parallel programs to build hydrogen-run vehicles and to develop the service stations and other infrastructure to keep the cars running.
Bush will propose funds of $273 million for the program during the government's 2004 spending year, which begins this Oct. 1. He will present his 2004 budget to Congress on Monday.
Abraham said it should be cost-effective to produce hydrogen-fuel cars in large numbers and have them in showrooms by 2020.
The cars could reduce U.S. demand for foreign oil by 11 million barrels per day by 2040, according to the department.